I have an Oilfield Pollution Incident. What Should I do Now?
Many oilfield pollution insurance policies operators & oilfield contractors purchase cover incidents that are sudden and accidental. Meaning there must be a known date and time of an accident that caused the pollution incident for insurance to cover that pollution incident. These types of pollution policies stipulate the oilfield operator or oilfield contractor must notify their agent and the insurer’s claims office as soon as the issue is discovered. The time frame varies from insurer to insurer. Typically no more than 15 to 30 days, depending on the policy language. Some insurers allow 180 days, but you should report the claim as quickly as possible.
It is important to understand any clean-up that commences prior to the insurer’s knowledge and notification of the incident may not be covered.
Insurers that offer pollution coverage have extensive experience and resources to assist you with pollution spills and incidents, and insurers request you follow their procedures for any pollution incidents, claims or potential claims. According to an Insurance Journal article “10 Things To Know About Pollution Liability” A.M Best’s Market Review Report revealed as of year end 2012, the industry had funded, through a combination of paid losses and loss reserves, some $38 billion in environmental costs.
6 Steps To Follow When An Incident Occurs
You just found out you have a potential oilfield pollution claim. Now what?
- Control the oilfield pollution incident by immediately taking steps reasonably necessary to stop or reduce the environmental damage that has resulted or may result from the incident.
- You should utilize local service providers or vendors as needed. As soon as you have notified the insurer’s claims office, the insurer will send a loss consultant out to advise and suggest the next steps and proper clean up possibilities.
- These insurers handle thousands of oilfield pollution claims, so they have extensive resources and networks to most cost effectively clean up an oilfield pollution spill.
- The insurers will help you keep costs and expenses down as well as work closely with any regulatory authorities.
- Once the oilfield pollution situation is controlled, do not authorize or request service providers or vendors to perform further clean up or remediation activity and refer the vendors to the insurer’s claims office before further clean up or remediation activity.
- The costs or expenses incurred without the insurer’s consent may not be covered under your oilfield pollution policy. Because not all remediation companies are the same, let the insurer’s claim’s representative ask all of the hard questions and do the negotiating on oilfield pollution clean-up solutions and methods.
Don’t Dig and Haul Unless You Want To Pay!
If you hire someone to come up and dig out the contaminated soil and haul away without the consent of the insurer you could be paying for this out of your company’s pocket, so don’t do it without the insurer’s consent.
The insurer will send an investigator and oilfield pollution consultant to work with you to formulate a cost effective, timely remediation plan that meets regulatory requirements. Once the plan is approved by all parties, the insurer will suggest appropriate service providers or vendors and continue to work with you and any vendors to ensure the clean-up situation is resolved appropriately.
You have paid for the oilfield pollution insurance policy, so let the policy and the insurer work for your company. Just remember to follow the proper procedures to ensure a timely and cost effective remediation of the oilfield pollution incident. If you have any further questions about oilfield pollution coverage or claims concerning your company, don’t hesitate to contact us.
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